With the spiraling price increase of all basic goods and services, your take-home pay can no longer take you home.
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How to Build Your Savings
With the spiraling price increase of all basic goods and services, your take-home pay can no longer take you home. Moreover, you can hardly manage to save a substantial amount for the rainy days, so to speak.
There is a solution to that. A money expert suggests that you set aside 10% of your net income each month, preferably in an investment such as a time deposit or trust fund where your money earns interest yearly. If you keep your money through a time deposit, you money will grow from 5 to 10% for one year. A roll-over time deposit will make your money grow even higher. But of course, expect that withholding tax will be deducted from the interest gained.
With a minimum of $500, you can put your money in a trust fund and it will grow at least 9% or higher. Or if you do not have the minimum deposit for a time deposit or trust fund, start building it up by putting 10% of your income in a regular passbook savings account.
This plan offers a built-in hedge against inflation to some extent. For every wage increase, remember that your savings also climbs. That is because you will be saving a percentage rather than a specific figure. Putting aside 10% on a regular basis is very different from putting aside $10 every month. You will never be left wanting and in need if you have saved for your future.
Is your Money Safe in the Bank?
If a bank gets burned or bankrupt, will your savings be burned with the bank or go down the drain as if it went puff forever?
Many people assume that their savings accounts are insured and absolutely safe. Yet some depositors get a very unpleasant surprise when they discover that their funds are not protected.
Some savings plans like trust companies do not qualify for insurance protection and do not have it.
Be sure, therefore, that your savings are insured. Ask before you open an account whether it will be covered under the insurance protection. You should worry if the savings certificate offered to you appears to be higher in interest rather than the insured accounts in your community. It is not worth taking the additional risk just to earn the relatively small additional return. It is advised that conservative savers keep their money only on insured banks.
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